Energy price cap expected to rise slightly

Independent energy analysis firm Cornwall Insights has predicted that regulator Ofgem will raise its Default Tariff Cap, which is more commonly known as the energy price cap, from £1,834 to £1,897 per year for the first quarter of 2024.

Ofgem calculates its price cap based on what it calls the Typical Domestic Consumption Values (TDCV), which reflect the electricity and gas that it estimates a typical dual-fuel, direct debit customer will consume in a year. The actual limit is on unit costs rather than total costs, so anyone using more than the TCDV will pay more than the headline rate.

Cornwall Insights says it calculates its own predictions as follows:

“We apply the Ofgem methodology with the current wholesale market prices for gas and electricity along with our own view of the non-wholesale elements of the bill. These are then applied to the identified TDCVs for gas and electricity to calculate the bill for a typical domestic customer.”

While wholesale gas prices have come back down from the highs seen after Russia’s invasion of Ukraine, industrial action by Australian gas workers and the shutdown of Israel’s Tamar gas field have been putting upward pressure on them again. With Cornwall Insights predicting that the price cap will remain at roughly the same level throughout 2024, it’s a good time to replace any older, less-efficient boilers.

XGas can dispatch heating engineers to various locations in North Wales, Cheshire and Shropshire to install highly efficient modern boilers. Get in touch today to ensure you get the best possible deal on your heating.